Mars Protocol News & Announcements

Mars Protocol News & Announcements pinned «Martians, today we share our final update. The wind-down of Mars Protocol, as approved in MRC-165, is now fully complete. All liquidation LTVs have been set to 0, remaining borrow positions have been liquidated, and every last bit of user funds, held in credit…»

Martians, today we share our final update. The wind-down of Mars Protocol, as approved in MRC-165, is now fully complete. All liquidation LTVs have been set to 0, remaining borrow positions have been liquidated, and every last bit of user funds, held in credit accounts or in Mars v1, has been safely returned directly to your wallets. Funds held in Amber will follow in the coming days and will be communicated via Amber’s X channel. This brings an orderly close to a journey that began five years ago with a bold vision: to build the most powerful, user-centric credit protocol in the Cosmos ecosystem. From the early days of pioneering leveraged strategies and credit accounts, through countless upgrades, community governance discussions, and moments of genuine innovation, Mars grew into something special, and that was entirely because of you. You lent, borrowed, ran high-leverage strategies, traded perps, debated proposals, shared feedback, and believed in what we were building together. We couldn't have asked for better Martians. As we turn the page, the official Mars Discord and Telegram channels will be shut down in the coming days. There will be no further updates or support through those channels. To every single one of you, users, investors, supporters, and contributors, who showed up, built with us, and made Mars what it was: thank you! From the bottom of our hearts. Your trust and energy made the ride truly unforgettable. The Mars Protocol contributors wish you all the very best in whatever comes next. May your wallets grow, your strategies stay sharp, and your path in this space lead to brighter days ahead. Mars Mission Control, signing off. https://x.com/mars_protocol/status/2038919794108326247

Mars Protocol News & Announcements pinned «Martians, the proposal to wind down Mars Protocol has now moved to the on-chain governance stage. Following the publication and forum discussion of [MRC-165] Proposal to Wind Down Mars Protocol, the formal proposal has been submitted to DAO DAO. If approved…»

Martians, the proposal to wind down Mars Protocol has now moved to the on-chain governance stage. Following the publication and forum discussion of [MRC-165] Proposal to Wind Down Mars Protocol, the formal proposal has been submitted to DAO DAO. If approved, execution will begin on February 24, initiating the structured wind-down process: • Gradual ~3% daily reduction of liquidation LTVs • Progressive deleveraging across all assets • Final LTV = 0 on March 21 • Full debt clearance and final migration • Distribution of remaining funds to depositors This represents the final governance step before execution. We encourage all token holders to carefully review the proposal and participate in the decision-making process. 🗳 Vote here: https://daodao.zone/dao/neutron1pxjszcmmdxwtw9kv533u3hcudl6qahsa42chcs24gervf4ge40usaw3pcr/proposals/A76 Forum discussion remains available here: https://forum.marsprotocol.io/t/mrc-165-proposal-to-wind-down-mars-protocol Thank you for your engagement, support and for being part of Mars. 🔴 https://vxtwitter.com/mars_protocol/status/2025177979857359317

Martians, today we published [MRC-165] Proposal to Wind Down Mars Protocol on the governance forum. After evaluating the current state of the protocol, including long-term sustainability, operational overhead, governance complexity, and growth prospects, contributors believe continuing normal operations is no longer in the best interest of users. The focus now is a responsible and orderly exit. The proposal outlines a structured wind-down from February 24 to March 21, 2026. Instead of an abrupt shutdown, liquidation LTVs across all assets would be reduced gradually (~3% per day), allowing borrowers to repay, add collateral, or close positions voluntarily. On March 21, all liquidation LTVs would be set to 0, any remaining borrow positions would be liquidated, and a final migration would be executed to fully clear debt from the system. Once all debt is eliminated, remaining assets will be reconciled, depositors will receive their proportional remaining funds, contracts will be disabled or migrated to a final state, and Mars Protocol will cease operations. For transparency: prior to putting forward this proposal, contributors explored whether a third party or new team would assume the Mars Protocol Foundation’s administrative responsibilities to maintain the protocol. No viable takeover materialized. Given that reality, a structured and predictable wind-down is considered the most responsible path forward. The governance process includes a 5-day forum discussion followed by a 3-day on-chain vote. If approved, execution would begin on February 24. We encourage all token holders and users to review the full proposal and provide feedback on the forum. We remain committed to handling this process transparently and responsibly. Full proposal: https://forum.marsprotocol.io/t/mrc-165-proposal-to-wind-down-mars-protocol

We will continue to communicate clearly as execution proceeds. Mars Protocol Foundation https://vxtwitter.com/mars_protocol/status/2014050834108108885 Neutron Foundation Relief Plan For Affected Mars Users: https://x.com/neutron_org/status/2014048218598838459

Update on Mars Wind-Down, Amber Continuity, and User Remediation Dear Mars Protocol Community, The exploit was a turning point none of us wanted — not the community, not integrators, and not the contributors who have spent years building Mars. We have read the feedback, we see the anger, and we understand it. Many of us believed Mars still had a future roadmap ahead. After this exploit, that future is no longer possible under the standards of integrity and user safety we hold ourselves to. After a risk and responsibility assessment, with user protection, operational complexity, and systemic protocol risk in mind, we reached a difficult conclusion: the Mars Protocol Foundation will wind down and proposes a shut down of the Mars Protocol in an orderly manner. This was not an easy decision for any contributor, but it is the responsible one. This post outlines: • what will happen to Mars • what will happen to Amber • how remediation will be handled Background Recap The exploit resulted in approximately $960,000 in bad debt, isolated to the USDC lending market. No other Red Bank markets were impacted. The Safety Fund has been deployed via governance to reduce the shortfall before losses were realized by USDC depositors. 1) Mars Protocol Foundation Wind-Down Mars Protocol Foundation will remain operational through March 23, solely to enable an orderly wind-down of the Mars Protocol with controlled position reduction. During this period, risk parameters will remain conservative; no new expansion of protocol activity is planned. The protocol will be maintained only to ensure safety, stability, and clean shutdown execution. After March 23, Mars Protocol Foundation will be fully shut down. The Foundation’s decision to wind down remains open to discussions with independent third parties who may be interested in assuming full ownership, responsibility, and maintenance of the Mars Protocol. Any such transition would require a qualified maintainer, clear operational accountability, and a path that does not introduce additional risk to users. No such transition is guaranteed, and unless one materializes, the Mars Protocol Foundation encourages the DAO to vote for a wind-down. This decision is driven by risk containment and the responsibility to avoid further exposure to users. 2) Amber Protocol Status Amber is a separate protocol with a distinct future path. Amber will continue operating and be maintained through March 23, ensuring no disruption in service or protocol safety during this period. We are actively discussing a transition of Amber to independent ownership and maintenance. Hadron Labs has indicated interest in taking over the maintenance of Amber. If a maintainer is finalized, Amber will be transferred and continue operating under new stewardship. If no maintainer is confirmed, Amber will be shut down after March 23 in an orderly manner. Further details on Amber’s future will be communicated once discussions are finalized. Until then, users can rely on uninterrupted operation and maintenance. 3) Independent Ecosystem Remediation In parallel to the Mars Protocol wind-down, an independent remediation effort is being coordinated by the Neutron Foundation to support affected users. This initiative is led and administered by Neutron under its own legal and operational framework. The Mars Protocol Foundation supports this effort as an ecosystem partner but does not control, administer, or guarantee its execution. Full details on eligibility, distribution mechanics, and the claim process are available in Neutron’s dedicated announcement at the end of the announcement. Closing We know this is not the outcome anyone wanted. We built Mars with the intent to uphold a high standard of integrity and user safety. This incident changed what is possible. What we can still do is act responsibly, shut down cleanly, and support a transparent remediation process, within the Foundation’s legal constraints, while independent ecosystem partners pursue additional remediation efforts.

https://vxtwitter.com/mars_protocol/status/2010416903244673405

🛰 Heads-up on upcoming USDC market migration Ahead of the upcoming USDC market migration and haircut execution, we want to clarify what this means for borrowers. As part of the mitigation measures introduced earlier, the maximum borrow LTV was reduced (from 92% to 60%) to limit new borrowing ahead of the haircut. This was done to prevent accounts from increasing exposure beyond the forecasted haircut. The liquidation LTV was not adjusted at that time. When the haircut is applied during the migration, accounts that are currently borrowed above the safe threshold may enter liquidation, as their collateral value will be reduced accordingly. This mainly affects positions that remained above the reduced borrow limits. USDC deposited as collateral is not subject to the haircut, as it does not count as lent USDC. This is why USDC deposits remain open via Fund Credit Account. Following the migration, we also expect significant USDC withdrawals, which may temporarily drive utilization higher and cause sharp increases in borrow interest rates until the market rebalances. To give users time to adjust, we plan to provide a ~24 hour notice window before executing the migration, during which affected users can repay or rebalance their positions if needed. https://vxtwitter.com/mars_protocol/status/2008448389944414649

🛰 [MRC-164] Update on Exploit Response and Action Plan - On-Chain Proposal We’ve submitted an on-chain governance proposal outlining the final steps to resolve the USDC market shortfall following the recent exploit. What this proposal does: • Executes a DAO treasury transfer of USDC to the Mars Protocol Foundation to repay USDC bad debt • Confirms a final USDC market adjustment of 27.5%, after applying Safety Fund, MPF, and CPV resources • Signals community approval for using additional MPF/CPV funds to further reduce user impact • Prepares a v2.3.3 Red Bank migration to reconcile USDC market accounting (executed separately after funding) This proposal focuses on a clear, deterministic path to restore USDC market accounting while minimizing losses using available, community-approved resources. Please review the proposal and cast your vote: https://daodao.zone/dao/neutron1pxjszcmmdxwtw9kv533u3hcudl6qahsa42chcs24gervf4ge40usaw3pcr/proposals/A75

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